Tuesday 17 September 2019
 
»
 
»
GLOBAL LEVELS TOO DROP

Mideast business confidence drops amid global uncertainty

DUBAI, January 19, 2017

Business confidence in the Middle East remained subdued in Q4 2016, with 51 per cent of firms reporting that they feel less confident about the future, according to a report.

The latest Global Economic Conditions Survey from ACCA (the Association of Chartered Certified Accountants) and the IMA (the Institute of Management Accountants) suggests that
the global business confidence has dropped in Q4 amid on-going political and economic uncertainty.

The uncertainties listed include:
•    Government investment  falling to its lowest level since the start of 2016, with many developed markets still firmly in austerity mode;
•    Changes in the political landscape stemming from the recent US election;
•    Uncertainty over  US / China trade developments;
•    Continued slump in oil prices and government spending reductions in Middle East
 
The survey of over 4,500 finance professionals and business leaders worldwide has found that while the economic outlook has improved slightly in the US and China over the last quarter, confidence in the Middle East remains subdued.

Almost half (44 per cent) of global respondents expressed concern over falling income due to low levels of government expenditure, with another 43 per cent reporting worsening business confidence.

Commenting on the findings Lindsay Degouve de Nuncques, head of ACCA Middle East, said: “The fall in oil prices continues to hit the Middle East hard, creating sharp declines in export and fiscal revenues. This has caused many governments to cut back heavily on key spending projects.

“This is particularly noticeable in Saudi Arabia, where the weakness of the government spending index has been the main driver of falling confidence. With the need to stabilise finances as well as raising interest rates to keep up with the US Fed’s tight monetary policy is placing considerable pressure on state investment.

“On the other hand, the UAE’s ability to adjust quickly to changing oil revenues means that there are signs of gradual recovery. Austerity is expected to ease in 2017, and the prospect of the 2020 World Expo and Iran’s improving relationship with global trade offer encouragement for future investment. Yet while growth is set to improve this year, confidence has fallen slightly as the region’s poor performance impacts on prospects,” said De Nuncques.

Faye Chua, head of business insights at ACCA, said the fall in confidence is part of growing uncertainty across much of the world’s biggest economies.

“Current political uncertainty is clearly having an impact on global business confidence. In the US the Trans-Pacific Partnership is unlikely to be ratified while likely restrictions on trade with key markets including China and Mexico are also major factors here. In Europe, uncertainty over the outcome of elections in the Netherlands, France and Germany – which could lead to major policy shifts for regional trade and the future direction of the Eurozone – all contribute to a gloomy outlook going into 2017.

“However, it is not all bad news.  Despite these concerns, the global economy may be on course for growth in 2017 as China responds positively to its economic stimulus programme and the US maintains a partial recovery,” said Chua.
 
Fieldwork for the Q4 2016 GECS took place between November 24 and December 13 and attracted 4,551 responses from ACCA and IMA members around the world, including more than 350 CFOs, the statement said. – TradeArabia News Service
 




Tags: economy | Middle East | confidence |

More Finance & Capital Market Stories

calendarCalendar of Events

Ads